In order to enhance its presence in Texas,
) announced a deal to acquire 21 branches from Citibank, the
consumer banking division of
). The company will pay approximately $36 million for the
branches, which is premium to book value of 4.25% of core
deposits (as of Sep 30, 2013).
BB&T will acquire all the Citibank branches located in
Austin, Bryan-College Station and San Antonio markets. Further,
the company will assume $1.2 billion in deposits and $134 million
in loans. The transaction, still subject to regulatory approvals,
is expected to close by the second quarter of 2014.
Following the completion of the deal, BB&T will have 81
branches in Texas, along with $2.8 billion of deposits and $2.1
billion of loans. While the company already has a presence in
Austin and San Antonio, it will be entering the Bryan-College
Station market for the first time.
BB&T entered the Texas banking region with the acquisition of
22 branches of Colonial Bank in 2009. In a span of four years,
the company witnessed widespread growth in the region. In Nov
2012, the company announced plans to expand further in the Texas
region through 30 branch openings, which have now been
Apart from banking branches, BB&T has other operations in the
Texas region. The company's subsidiaries, Regional Acceptance
Corporation, McGriff, Seibels & Williams, Inc, BB&T
Insurance Services, BB&T Capital Markets, BB&T Investment
Services and Grandbridge Real Estate Capital LLC are
well-established names in the state.
BB&T's expansion strategy is going to further increase its
expenses. In the first nine months of 2013, the company's
operating expenses were $4.3 billion, up nearly 1% from the
On the bright side, BB&T's top line will be positively
impacted by the acquisition. Further, loans and deposit balances
will witness substantial improvements. All these should boost the
company's financial performance, going forward.
At present, BB&T carries a Zacks Rank #3 (Hold). However,
some better-ranked banking stocks include
Fifth Third Bancorp
). Both of these carry a Zacks Rank #2 (Buy).
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